System for electronic barter, trading and redeeming points accumulated in frequent use reward programs

ABSTRACT

A system and method for operating a reward points accumulation and redemption program wherein a user earns reward points from a plurality of reward points issuing entities, each of the reward points issuing entities tracking the user&#39;s earned reward points in a user reward point account stored on a rewards server. A trading server accumulates the user&#39;s earned reward points from each of the reward servers interconnected over a network in association with consideration provided by the reward servers to the trading server and credits the accumulated points into a reward exchange account associated with the user. The user may then select an item for purchase from a merchant computer interconnected to the network. The merchant computer provides the item to the user in exchange for consideration received from said trading server, and the trading server reduces the number of points in the user&#39;s reward exchange account in accordance with the consideration provided to the merchant computer.

CROSS-REFERENCE TO OTHER APPLICATIONS

This application is based on and claims filing priority of co-pendingU.S. provisional patent application Ser. No. 60/140,603, filed on Jun.23, 1999.

BACKGROUND OF THE INVENTION

The present invention relates to electronic bartering systems that allowusers to trade or redeem reward points, such as those alreadyaccumulated in airline frequent flyer programs, into an account forredeeming products and services offered over the Internet. This wouldallow users to use their frequent flyer (or frequent car rental,frequent dining, etc.) points for products or services other than thosetypically offered by the point sponsor. The points would be sold back tothe airline (or other type of issuing entity). The system would alsoallow for purchase by users of points traded in by other users, suchthat points are redistributed without incurring a transaction directlywith the airline or other issuing entity. The system also allows formanufacturers and producers of goods to put overstocked or discontinued,end of run products into a liquidation process that can be exchanged forpoints.

In order to attract and retain business customers, airlines, hotels, carrental companies, chain retailers, telecom providers, etc. havehistorically introduced frequent use programs that offer awards of“frequent flyer miles” or other such incentives schemes based on thedistance traveled or use by that customer. Competition has forcedairlines to modify the manner in which mileage was acquired to includetravel related purchases by consumers. For example, the dollar-basedcost of a ticket purchased may be awarded as mileage to a clientaccount. Within the past several years, credit card companies or otherretailers and etailers have co-branded credit cards in the name of theairlines and the credit card company where each dollar spent using thecard is recorded as a mile of travel or point in the award program.These cards may additionally award bonus miles in coordination with userpurchases of preferred products or flights during preferred times.

U.S. Pat. No. 5,774,870, FULLY INTEGRATED, ON-LINE INTERACTIVE FREQUENCYAND AWARD REDEMPTION PROGRAM, issued to Netcentives, Inc. on Jun. 30,1998. The '870 patent provides a system whereby the user can makepurchase of products over the Internet and receive award points, whichare stored in an associated database. The user can subsequently view anaward catalog to determine which awards he may be able to redeem basedon the number of points in his account. This patent does not teach,however, the ability of a user to trade-in his points accumulated in apre-existing frequent flyer account in order to make purchases ofproducts from the award catalog or allow the points to be pooled withother programs in order to gain further purchasing power.

The ClickRewards program site appears to operate in the same fashion asthat described in the '870 patent; i.e. it allows users to gain points(called “ClickMiles”) for making an online purchase of a product throughan associated web site. For example, ClickMiles may be awarded for apurchase of Gap products at the Gap web site. The ClickMiles canultimately be redeemed for frequent flyer miles, for example at one ofseveral major airlines. Another web site, www.webflyer.com, isassociated with ClickRewards and provides ClickMiles for purchasingfrequent flyer-related goods, such as guidebooks.

The ClickMiles Reward Catalog allows the user to redeem the ClickMilesfor merchandise in the alternative to frequent flyer miles. For example,a CD can be obtained from CDNow by redeeming 900 ClickMiles.

Although the ClickRewards program allows a user to redeem accumulatedpoints for obtaining merchandise over the Internet, it does not allowfor the redemption of frequent flyer miles from a pre-existing accountto be traded for reward points.

U.S. Pat. No. 5,794,210, ATTENTION BROKERAGE, issued on Aug. 11, 1998 toCyberGold, Inc. The '210 patent describes a system that makes immediatepayment to a user for paying attention to an advertisement or other“negatively priced” information distributed over the Internet. A specialicon or other symbol displayed on a computer screen may representcompensation and allow users to choose whether they will view an ad orother negatively priced information and receive associated compensation.The points accumulated can then be used to purchase “positively pricedinformation” or products.

The CyberGold web site, www.cybergold.com, describes an “earn and spend”community in which users earn “cash” online, for example by visiting aportal site. The earnings can then be used to make online purchases,such as software.

Again, although the '210 patent and the CyberGold web site describe anincentive system that allows users to purchase products or services overthe Internet, neither teaches the ability of the redeeming frequentflyer miles from a pre-existing account for reward points.

U.S. Pat. No. 5,025,372, SYSTEM AND METHOD FOR ADMINISTRATION OFINCENTIVE AWARD PROGRAM THROUGH USE OF CREDIT, issued on Jun. 18, 1991to Meridian Enterprises, Inc. The '372 patent describes an incentiveaward program in which credit is awarded to participants based on theparticipant meeting a designated level of performance under the system.This patent does not teach the ability to increase the reward points ina user's account by redeeming points from a pre-existing account such asa frequent flyer mileage program.

With regard to FIG. 1, a model of the frequent flyer systems of theprior art is presented. Two different airlines servers are shownsurrounded by their related marketing partners. In order to lure morebusiness travelers, the airlines have established marketing agreementswith travel related companies to provide the business traveler with amore robust way to generate rewards in the form or frequent flyer miles.These marketing arrangements or associations have typically involvedcredit card companies, phone companies, hotel chains and car rentalcompanies. Any purchases made through these “co-branded” partners werethen awarded to the user periodically. Bonus miles or points mayadditionally be accumulated based on the user's actions in response tooffers made by the airline or in coordination with the partner company.For example, phone companies offer bonus miles to users based on theuser's agreement to change phone service. These points are obtained bythe partner companies by purchasing them from the issuing entity forredistribution as an incentive to utilize their particular goods and/orservices. FIG. 2 shows some sample co-branded cards that arerepresentative of marketing agreements between TWA, Sprint, andMastercard. In order to receive these benefits, the user must sign upwith each of the partner companies separately and provide the frequentflyer account number that is to receive the credited miles. A usereither making phone calls or purchases in accordance with the agreementsmade with each of these partners will first accumulate a value on thepartner's system which in turn is periodically updated on the airlineserver to reflect the value earned during that period. FIG. 3 isrepresentative of a typical user account that shows various earnings inthe system transferred in from any of the co-branded partners. Therecords of the table in FIG. 3 identify the source of the rewards, thedates they were recorded and the number of miles associated with thattransaction. The user can view the accumulated miles by accessing theairline server or by tracking the individual value reported to the userthrough the various bills the user receives from each of the co-brandedpartners.

The prior art does not provide for a consumer to utilize relativelysmall amounts of reward points in any manner. In addition, a consumeroften can only redeem points in an airline-related manner (i.e. toobtain a free ticket or upgrade from coach to first class). This priorart does not recognize the need for a consumer to exchange reward pointsfor non-travel related goods, and in particular renders relatively smallnumbers of points useless. For example, a consumer that does not traveloften may have 500 points in United Airlines, 700 points in USAir, and1000 points in TWA, each of which is relatively useless in the priorart.

What is desired therefore, is a system where users may submit frequentflyer awards or credits accumulated for other types of transactions forredemption or translation into a form readily acceptable by aparticipating merchant. An exchange rate will be established for therelative consideration received by the companies involved in thetransaction. A user should be able to pool the various earned rewardsthat may exist in currently separate server systems where the resultingcombined value may be used by a user of the system to acquire items ofequivalent value. In another embodiment, the award program looking toreduce frequent flyer liabilities may contact users and arrange for atransfer of the reward miles into a value (which may be predetermined)to be credited to the trading system reward. Alternatively, the pointsmay be bid for in an auction environment where points may be used to bidfor certain awards. A user who has earned frequent flyer miles orrewards on several sites insufficient to receive any direct value fortheir mileage may be able to pool the miles acquired from severaldifferent air carriers to transfer the awards accumulated to the systemof this invention. The user may have the selected items delivered to theuser by performing a purchase request by various means such as over theInternet, dialing a toll free number for placing an order, or any othermeans of placing an order that will accept payment from this system.

SUMMARY OF THE INVENTION

This invention allows a user to purchase goods or services usingaccumulated award points held by a variety of award programs. A frequentflyer program is typical of the systems to be encompassed by thisinvention. Tie-in promotions have been introduced over the past severalyears that have allowed purchases for goods and services such as hotelor car rentals to accumulate award miles that are then recorded on theairline award system. More recently credit card companies offer cardswhere a mile award is made for every dollar spent using that creditcard. These cards may additionally award bonus miles in coordinationwith user purchases of preferred products.

A system and method are disclosed where the system allows the user toredeem the accumulated reward points from a plurality of reward entitiesfor exchange with a merchant. The user requests process for redemptionof the pre-accumulated reward points comprises the steps of the userrequesting, via a user computer, a trading server computer to obtainreward points from a reward server associated with a rewarding entitywith which the user has reward points. The reward server computerdecreases the users reward account by the requested number of rewardpoints. The reward server computer conveys consideration to the tradingserver computer, where the consideration corresponds to the number ofreward points decreased in the account of the reward server. The tradingserver computer increases the reward exchange account on the tradingserver associated with the user by the requested number of points. Thetrading server receives the consideration from the reward servercomputer. Following or anticipating this conversion into the tradingserver, the user requests a purchase of an item from an associatedmerchant computer by selecting the item to be purchased from a pluralityof available items. The trading server computer confirms that the user'sreward exchange account contains sufficient points to purchase theselected item. The user may purchase additional points in the event thathis account does not contain the requisite number of points for makingthe purchase transaction. The trading server computer requests themerchant computer to deliver the item to the user. The trading serverdecreases the user exchange account by the number of pointscorresponding to the purchased item and the trading server computerconveys consideration to the merchant computer equivalent to therequired points. In another embodiment, the user may redeem rewards atthe reward server following the selection of an item to be acquired.Policies may be established to automatically contact each of the rewardservers according to a user procurement profile to transact the requiredpayment. This profile may indicate the order of redemption and method ofproviding funds sufficient to cover the purchase after redeemable pointsare exhausted. After redemption the consideration is transferred to therespective merchant.

BRIEF DESCRIPTION OF THE DRAWING

FIG. 1 is representative of the prior art marketing arrangements used inreward programs;

FIG. 2 is a representation of the co-branded partners in a prior artaward program;

FIG. 3. is a sample of the prior art reward summary from an airlinefrequent flyer system;

FIG. 4 is a block diagram of the components of the present invention;

FIG. 5 is a block diagram of the system components of the presentinvention;

FIG. 6 is a data flow diagram of the process for a user to redeemrewards;

FIG. 7 is a data flow diagram of the user request for purchase of anitem at a merchant site;

FIG. 8 is a data flow diagram of the user account creation process onthe trading server;

FIG. 9 is a data flow diagram of the offer process by a reward programor by a merchant;

FIG. 10 is a data flow diagram of the process where a user may beredirected from a reward program to the trading server of the presentinvention.

DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENT

With reference to FIG. 4, a plurality of reward server computers 10, 12,14, a trading server 20, a merchant computer 30 and a user computer 40are shown in communication with a network 40. The network may compriseany type of communication process where computers may contact eachother. The present invention will be described with respect to anInternet-based network where the reward server computer 10 is associatedwith an airline frequent flyer program. Any type of reward server mayalso be used in this system. The reward server computer may be a creditcard reward program such as offered by American Express where the userearns rewards based on purchases or an advertising based award programwhere the user earns rewards by selecting advertising content.

A user of this system may acquire and accumulate rewards through anyprior art means such as shown on FIG. 1, which are then posted in auser's reward account 52 that is accessible through the reward servercomputer 10. The trading server computer 20 is in communication throughthe network 2 with a user on a user computer 40 and is additionally ableto connect to the reward server computers 10,12,14 through the network 2in accordance with techniques well known in the art for Internetcommunications. The merchant computer 30 is representative of any sitethat can communicate with the network that has goods or services forsale or trade. The merchant may have a direct relationship with thetrading server where the direct relationship allows for a streamlinedprocess for allowing a user to acquire products offered via the merchantcomputer. Alternatively, the merchant computer may be an independentmerchant that does not currently have a profile defined in the tradingserver that will accept payment from another computer system in any oneof well known e-commerce embodiments.

The rewarding entities may be any type of entity that has a service forallocating points or consideration for user actions. The reward servercomputers 10,12, 14 may be of any type of accessible server capable ofholding data about a user along with a corresponding earned value thatis negotiable for other goods, services, or points of another system. Inthe preferred embodiment, the airline reward server computer 10 mayrefer to one or several different airlines that have frequent flyerprograms or the like. The credit card reward server computer 12 mayrefer to any type and number of credit card server systems capable ofholding, increasing or decreasing a user's earned rewards acquiredaccording to the terms of the credit card program to which the user hasenrolled. The marketing reward server computer 14 may refer to one or amultitude of network accessible marketing systems that allow a user tohave an account where points or other redeemable value may be stored,updated and redeemed by a user. The trading server computer may be anytype of computer system that allows users to access the system in orderto perform the processes involved in this invention. In the preferredembodiment all of the systems described are accessible through theInternet and the user may freely navigate to any site by means wellknown in the art.

The present invention allows issuers who originally sold reward pointsin their program for use as an incentive by third parties to repurchasepoints at a substantial discount, thereby reducing their liability andallowing for a trading strategy that enables points to continually besold and repurchased. This may be a separate accounting procedure thanwhat is used for points that are granted.

The method of allowing the user to redeem the accumulated reward pointsfrom one or more of a plurality of reward entities will now be describedwith respect to FIG. 4 and the data flow diagram of FIG. 6. The tradingserver system would allow users to “log in” to access the functionalityprovided where the user may interact with applications, forms orcontrols. For example, the user may view his account information byusing a web browser to enter the appropriate identification informationand then select buttons, links or other selectable objects to navigateto the part of the system desired. The user, from the user computer,makes a request to the trading server computer 20 at step 102,requesting redemption through the network 2 for a portion of thepre-accumulated reward points stored for the user in one of therewarding entities. A user reward account 52 is associated with each ofthe reward servers but is only shown in FIG. 4 connected to the airlineserver for sake of clarity. The user may interactively select rewards tobe redeemed, or the system may determine which rewards are to beredeemed based on a previously defined user profile rule. The tradingserver computer 20 “obtains” the reward points from a reward server 10,12, 14 stored in the user's account 52 by contacting the appropriatereward server at step 110 according to the user's requirements, by usingthe connection parameters as defined in a database 54 on the tradingserver as shown in FIG. 5. In one embodiment, the trading serverretrieves reward account balance information at step 114 from the rewardserver for the user. In another embodiment, the trading server transfersas part of the communication 110, the requested reward mileage to beredeemed. The reward server computer 10 decreases the users rewardaccount 52 by the requested number of reward points. The term point isused to reference any earned value that has a cash equivalent ornegotiable worth as in “frequent flyer” point or mile. The reward servercomputer 10 conveys consideration to the trading server computer 20where the consideration corresponds to the number of reward pointsdecreased in the user's account 52 on the reward server 10. For example,the consideration may be in the form of a monetary credit to an accountthat exists between the trading server and the reward server, that getspaid at the end of a predefined billing cycle (i.e. every month). Thetrading server computer 20 increases the reward exchange account 54associated with the user by the received number of points. The tradingserver computer 20 in turn, receives the consideration from the rewardserver computer 10.

In the second part of the transaction (see FIG. 7), the user from a usercomputer 40 may make a request 150 to purchase an item from anassociated merchant computer 30. In the preferred embodiment, themerchant computer system will be a networked computer system accessiblevia the Internet. The user would visit the site by selecting on a linkfrom the trading server's web site or by entering the name or address ofthe destination site. The user may identify one or many items to beacquired from one or several merchants 30. The trading server computer20 would confirm that the user has sufficient points to purchase theselected item by checking the user's reward exchange account 54. Thetrading server computer 20 would request the merchant computer todeliver the item to the user. The user delivery information may beretrieved from the trading server computer 20 or may be supplied in someother manner. The trading server computer 20 would decrease the userexchange account 54 by the number of points corresponding to thepurchased item. The trading server computer 20 conveys consideration tothe merchant computer 30 equivalent to the cost of the item by meanswell known in the art of electronic commerce (eg. by a preexistingaccount, credit card, etc.) In the alternative, the consideration may bea direct transfer of points to an account associated with the merchant.

Policies and profiles may be established to automatically contact eachof the reward servers according to a user redemption profile (see FIG.5) to transact the required payment for an item selected by a user. Thisprofile may indicate the order of redemption and method of providingfunds sufficient to cover the purchase after redeemable points areexhausted. For example, if a user has a preferred air carrier where theuser would like to retain mileage in that reward system, the user mayspecify a priority of use indicating the reward resources that should beexhausted prior to accessing the most desirable rewards. Following theselection of an item to be acquired, the server may contact all of thereward resources according to this profile to selectively redeem each asrequired to meet the purchase price. The process may be performed inreal time or as a background process where the user may select how thetransaction should proceed. If the user exhausts lower personal worthresources from the reward servers, the system may be required to contactthe user before the transaction is allowed to proceed to redeem points.A classification system may also be used to indicate rewards of similarworth. If for instance, a frequent flyer program supports multipleclassifications of miles that may be redeemed differently, the user mayoptionally define how those resources should be managed duringredemption. The redemption process would then honor those rules electedby the user to select from several different reward programs instead ofredeeming rewards strictly on a value required from the first rewardprogram contacted.

FIG. 8 describes the process steps involved in enrolling a user toutilize the trader server. The data entered by the user may be used indetermining whether a user allows unsolicited offers to be presentedfrom the trading server. The user's preferences for manufactured goodsservices, products, travel destinations, hobbies, interests or any otheruser entered criteria may be stored in the database for subsequent useby the system. The trading server has the ability to receive offers fromreward servers or merchants which may then be directed to users based onthe database profile information provided by the user (see FIG. 9).

The trading server may also be contacted in response to a button orhyperlink located on a web page accessible by the user from the airlinereward server. In a similar manner, hyperlinks or calling routines mayallow a user to access a reservations system or merchant from thetrading server. The link would direct the user to partner or associatedair carriers where the points in a user exchange account on the tradingserver 20 may be used to acquire reduced fare flights.

The system used to implement the aforementioned method will now bedisclosed with respect to FIG. 5. The system is comprised of a tradingserver computer connected to a network of computers where a userinterface is established whereby a user from a user computer may accessthe server to request the transaction to contact a reward servercomputer system. In the preferred embodiment, the server has memorymeans for storing the user account information, user profiles and rulesspecified by the user, system, or merchant. The trading server also hascommunications means to allow users to access the server and to allowthe trading server to contact reward servers and processing means tointerpret the rules and coordinate the contact to the respective rewardservers. The processing means is adapted to allow the user to requestand exchange consideration for rewards from reward servers. Theprocessing means additionally is adapted to coordinate the exchange ofconsideration and increase or decrease the user exchange accounts storedin memory in response to actions performed by the user computer, rewardserver and merchants.

In the preferred embodiment, the memory means comprises a databasestructure that is used to record the transactions associated with thepreviously described method. Records indicating the changes and currentvalue of user exchange accounts are updated according to the requestprocessed by the processor.

In response to a request for redemption, the trading server looks up thecontact properties of the reward server to be contacted. The userinformation is submitted to the reward server to display the availablepoints that may be redeemed. In another embodiment, the requestadditionally contains a value to be redeemed. The processor establishesa communication link with the reward server and a transaction request issent to the processor of the reward server. The processor of the rewardserver may perform actions that may allow or refuse the requestedaction. In another embodiment, the trading server processor may begranted direct authorization to modify the user's records in the rewardserver database without analysis by the processor of the reward server.A conversion rate may be applied to the transaction such that the rewardserver reduces the available rewards in the user's account. The rewardserver then transfers consideration to the trading server thatcorresponds to the value reduced in the reward system. In response tothe receipt of the transfer or approval of the transfer, the tradingserver increments the user account balance to reflect the receivedconsideration and the connection to the reward server is dropped. Atransaction log may be used to record each of the transactions in case areconciliation process is required at a later time. The increase in theuser's exchange account may then be stored until a user finds an item tobe purchased.

The user selects the desired object from the merchants by indicating thetype of product or service to be procured. In one embodiment, thetrading server contacts the merchant server to return to the user a listof products that match the user's search criteria or if the user hadspecified in detail what was desired, the product may be directlyacquired from a merchant. A communication link is established betweenthe trading server and the merchant computer or designee for e-commerce.Direct acquisition may be enacted by contacting the merchant computerand supplying the user indicia, the product indicia, and the redemptionvalue sufficient to secure the transaction. In response to thetransaction request, the merchant computer will receive theconsideration supplied and contract for the delivery of the product. Inanother embodiment, the consideration required for the item selected issent to the trading server where based on the available points in theuser's exchange account the trading server will determine whether theconsideration is available. An authorization process may be incorporatedat this point to request authorization from the user or in a moresimplified process, the consideration will be transferred to themerchant computer and the user's exchange account will be reduced. Themerchant computer will receive the consideration and will effectuate adelivery transaction to be issued.

The goods may also be placed under direct control of a distribution armof the trading service so that the user places the order with thetrading service directly and the merchants are not directly involvedwith the sale of the goods.

Thus, the present invention provides a liability management system forissuers of reward points, which allows them to take points off the booksand eliminate them, if desired, at a discount rate. This system enablesthe sale or repurchase of points with a trading strategy in which pointsneed not expire.

The present system may be implemented by means of a smart card whereinfrequent use points may be accumulated on the user's card every time thecard is used for associated application. For example, if a user uses hissmart card to pay for a hotel that normally gives reward points, thosereward points may be stored on the smart card. Likewise, when the cardis used for the purchase of an airline ticket, the points would be addedto the smart card. The user may then redeem the accumulated rewardpoints by inserting the card into a vender associated with a computerconnected to the Internet. The trading process proceeds as describedabove, except that the points are obtained directly from the smartrather than a reward server.

The user may have a credit card, debit card, or stored value card thatis linked to their points account in such a way as to permit them to payfor purchases with a merchant by using the card, wherein the merchantuses the existing credit card payment infrastructure as if payment werebeing made/authorized by a bank linked to the credit card or debit cardaccount, but in fact the card is linked to the user's points account. Inthis manner, the user and merchant can use the points account to pay forpurchases in a seamless manner whereby points are used for considerationrather than or as a supplement to cash and traditional credit.

Other aspects of this invention will now be disclosed that will enhancethe reader's understanding of the application of this invention.

The user can purchase points from the system, borrow points from thesystem, etc., and basically treat the points as cash consideration forpurposes of such transactions.

The system can prioritize the order of points being traded based on apredetermined set of rules such as in higher value points being issuedbefore those with a lower value.

Merchandisers also benefit from the use of this system where anothermarketing channel is afforded for products that are often purchased byfrequent travelers with high disposable income. Products and servicesencompassing jewelry, flowers, limousine transport, timeshare rental maybe exchangeable for points stored in this system. Items purchasedthrough the system may also be paid for by a combination of points andcurrency which might be the case when a user does not have enoughaccrued points to meet the purchase consideration of an item selected.

It is anticipated that high quality limited access products may benefitfrom the distribution methods afforded by this system. For example,companies like DeBeers and Chanel may take advantage of thisdistribution means without impacting the level of quality or excellenceassociated with their products.

Manufacturers can discount or liquidate goods for points in a mannerthat doesn't negatively affect the perceived value of the goods (i.e.not in direct competition with the mainstream sales). That is, themanufacturer can place overstocked, end of run type goods and the like,place them in the chain of distribution for exchange with points, andnot be in direct competition with cash sales of its mainstream products.

Resort destinations that are managed by property management companiessuch as RCI may be integrated into this system where instead of tradingaccommodations with only those having similar property, it is nowpossible that the rental of the property may be achieved by conversionfor points.

Offers may be distributed to users of this system where substantialrebates or reduced rates are described in the offer. Time sensitiveproduct offerings can also be accommodated in the system where the valueof the product is decreased according to a life span of the product.Time sensitive product offerings such as food products or concerttickets can have an associated diminishing or escalating value based onthe length of the offer.

Using this system it is now possible to coordinate the products ofseveral different providers into one package. A user of this system maytherefore select an airline, hotel, car rental and Broadway show ticketsin New York, individually or in a prepared package from one location bytrading points where the package may not have existed before where thetrading system coordinates all aspect of the transaction and reduces theuser's exchange rewards in a corresponding manner.

Other purchasing leverage not specifically addressed previously may alsobe acquired by combining the power of a pool of high profile users ofthis system where these users may be allocated access to products orservices not generally distributed to the remainder of the system users.Points collected in the system by these users may afford them access tolimited distribution channels where higher discount levels or premiumluxury products may be acquired. Direct access to cartel products suchas diamonds, duty free items and other restricted access product orservice offerings are also accommodated through the coordination of thetrading server with these specialized service and product providers. Forexample, a preferred client distribution channel such as found in aEuropean market for luxury goods would be made available to users ofthis system where the prices for the objects in this preferred channelmay be significantly lower than retail for objects that are typicallyreserved for limited distribution at premium prices. The trading servermay additionally have exclusive rights to allocate access to certainpremium products, services, events, travel destinations oraccommodations in accordance with any right or grant permitting suchallocation to any user of the system. A distribution channel may makeavailable exclusive products for all or a limited amount of the membersof the system where the trading server system controls access to theoffer. Parameters associated with the available quantity, duration,exchange rates, etc may be input into the system to be used in theallocation algorithm to restrict the offer. Upon user access, thetrading server would, in these cases, modify the premiums offered toreflect the immediately attainable items for the current user and mayadditionally display or provide access to premiums that may be acquiredthrough payment by other means (i.e. cash, charge, debit) to make up thedifference between the user's available points and the points requiredto accept the offer.

In another embodiment of this invention, airlines seeking to providehigher levels of personalized service for their business travelers willprovide access to the Internet or access to in-flight services such asvideo games, for a fee or in place of granting mileage rewards ontranscontinental or transatlantic flights. Access to video games may beafforded to the traveler where the availability of different gamesdepends on the number of reward points traded in by the traveler. Therewards may be converted using the trading server of this invention,where the user may opt to forego collecting mileage in return foraccessing on-board entertainment provided in a standalone mode or in alinked mode. For example, users may select to play video games, accessthe Internet or utilize Email via a seatback or tray table mountedinterface and controller. The user may optionally connect a laptopcomputer to an interface port of the aircraft using an Ethernet,parallel, USB connection or proprietary connector provided by the aircarrier. In the preferred embodiment, the user would select theconnection speed and type for communications based on whether in-flightor external services were to be accessed. Other types of businessservices may additionally be used and accounted for, such as usingnetwork printers or fax equipment. RF, satellite or microwave basedcommunications may be used for real time communications where sufficientgeographical coverage is provided.

The interface would allow a user to login using the frequent flyeraccount information or preferably, the trading server account login idand password, where the user may use points awarded from another aircarrier or point server to “pay” for the services accessed. The accountbalance from the trading server may be transferred to the localcontroller prior to takeoff for each user that logs in to the tradingserver. Once the plane has departed, depending on the linking or accesscapability afforded by the air carrier or service provider, the user'saccount may be modified in real time or upon reconnection followinglanding, based on services selected by the traveler. If a real time linkis supported, the user's exchange account may be periodically debitedaccording to the services selected and duration of use.

In another aspect of the invention, an electronic bartering system isimplemented, wherein product manufacturers, producers, distributors,etc. can provide surplus or overstocked goods for liquidation into thechain of supply of the system and exchange then for points as describedherein. This provides an inventory management and liquidation system forthese manufacturers and sellers.

In addition, the value of the reward points may fluctuate as a functionof the company's performance, which may be measured by reference to theprice of its stock, revenue, earnings, or some other parameter that isagreed to that reflects the relative performance of the company. In thismanner, companies that perform well would provide an additionalincentive to a user for using their frequent use program rather than acompetitor's program. For example, all other parameters being the same,a user would likely choose the Acme credit card company over the Betacredit card company when the user determines that the Acme companyperformance results in a 10% increase in the number of points otherwiseearned by using its credit card. The value may also fluctuate as afunction of the number of points outstanding or the desirability of theissuer to reduce its liability or make it more robust.

1. A method of operating a reward points accumulation and redemptionprogram comprising the steps of: a) a user earning reward points from aplurality of reward points issuing entities, each of said reward pointsissuing entities tracking the user's earned reward points in a userreward point account stored on rewards server, and b) a trading serveraccumulating the user's earned reward points from each of said rewardservers interconnected over a network in association with considerationprovided by said reward servers to the trading server and crediting saidaccumulated points into a reward exchange account associated with theuser.
 2. The method of claim 1 further comprising the steps of: c) theuser selecting an item for purchase from a merchant computerinterconnected to the network, d) the merchant computer providing theitem to the user in exchange for consideration received from saidtrading server, and e) the trading server reducing the number of pointsin the user's reward exchange account in accordance with theconsideration provided to the merchant computer.
 3. The method of claim1 in which the reward points issuing entities are selected from thegroup comprising an airline reward issuing entity, a credit and rewardissuing entity, a hotel reward issuing entity, and a rental car rewardissuing entity.
 4. The method of claim 1 in which the considerationprovided to the trading server by the reward issuing entity has a valuehigher than the value of the user's earned reward points that areexchanged for said consideration.
 5. The method of claim 1 in which thenumber of points in the user's rewards server account is decreased bythe number of points obtained by the trading system.
 6. The method ofclaim 2 in which the reduction in points in the user's account in thetrading server is higher than the equivalent number of points needed topay for the requested item whereby the trading server realizes acommission on the exchange of the user's points for the purchased item.7. The method of claim 2 in which the purchase may be accomplished witha combination of points exchange by the trading server and otherconsideration provided by the user.
 8. The method of claim 2 in whichthe item for purchase from a merchant computer is obtained from amanufacturer's overstocked inventory at a reduced price.
 9. The methodof claim 2 in which the item for purchase from a merchant computer isobtained from an inventory of timeshare properties available forexchange.
 10. The method of claim 2 in which the item for purchase froma merchant computer is obtained from duty free or other restrictedaccess goods.
 11. The method of claim 1 in which the trading servertransfers a user's accumulated reward points to a smart card associatedwith the user.
 12. The method of claim 11 in which the user may make apurchase with a merchant directly by utilizing the smart card toexchange stored accumulated reward points with the merchant for adesired item.
 13. The method of claim 1 in which the user's accumulatedreward points are used to pay for entertainment services.
 28. The methodof claim 1 in which the number of earned points in a given user's rewardpoint account fluctuates as a function of the performance of theassociated reward points issuing entity.
 15. A reward pointsaccumulation and redemption system comprising: a. a plurality of rewardpoints issuing entities, each of said reward points issuing entitiescomprising means for tracking the user's earned reward points in a userreward point account stored on a rewards server, and b. a trading serveraccumulating the user's earned reward points from each of said rewardservers interconnected over a network in association with considerationprovided by said reward servers to the trading server and crediting saidaccumulated points into a reward exchange account associated with theuser.
 16. The system of claim 15 further comprising: c) computer meansfor allowing a user to select an item for purchase from a merchantcomputer interconnected to the network, d) a merchant computer forproviding the item to the user in exchange for consideration receivedfrom said trading server, and e) means for the trading server to reducethe number of points in the user's reward exchange account in accordancewith the consideration provided to the merchant computer.
 17. The systemof claim 15 in which the reward points issuing entities are selectedfrom the group comprising an airline reward issuing entity, a credit andreward issuing entity, a hotel reward issuing entity, and a rental carreward issuing entity.
 18. The system of claim 15 in which theconsideration provided to the trading server by the reward issuingentity has a value higher than the value of the user's earned rewardpoints that are exchanged for said consideration.
 19. The system ofclaim 15 in which the number of points in the user's rewards serveraccount is decreased by the number of points obtained by the tradingsystem.
 20. The system of claim 16 in which the reduction in points inthe user's account in the trading server is higher than the equivalentnumber of points needed to pay for the requested item whereby thetrading server realizes a commission on the exchange of the user'spoints for the purchased item.
 21. The system of claim 16 in which thepurchase may be accomplished with a combination of points exchange bythe trading server and other consideration provided by the user.
 22. Thesystem of claim 16 in which the item for purchase from a merchantcomputer is obtained from a manufacturer's overstocked inventory at areduced price.
 23. The system of claim 16 in which the item for purchasefrom a merchant computer is obtained from an inventory of timeshareproperties available for exchange.
 24. The system of claim 16 in whichthe item for purchase from a merchant computer is obtained from dutyfree or other restricted access goods.
 25. The system of claim 15 inwhich the trading server transfers a user's accumulated reward points toa smart card associated with the user.
 26. The system of claim 25 inwhich the user may make a purchase with a merchant directly by utilizingthe smart card to exchange stored accumulated reward points with themerchant for a desired item.
 27. The system of claim 15 in which theuser's accumulated reward points are used to pay for entertainmentservices.
 28. The system of claim 15 in which the number of earnedpoints in a given user's reward point account fluctuates as a functionof the performance of the associated reward points issuing entity. 29.The method of claim 2 wherein the item selected for purchase by the userhas a discount associated therewith.